The God Tax

Canadians subsidized religious charities through upwards of $2.1 billion to $3.8 billion in potential foregone federal and provincial tax revenues in 2023. These subsidies arise from policy decisions to maintain ‘advancement of religion’ as a charitable purpose. As governments face increasing budgetary pressures, this support demands greater scrutiny.

Building on previous work by Centre for Inquiry Canada (CFIC), we use 2023 data from Canada Revenue Agency (CRA) and Statistics Canada to update estimates of the foregone revenue resulting from charitable tax credits issued by Canadian religious organizations. We reassess CFIC’s assumptions and offer an alternative methodology that models the distribution of donations and donor incomes to better account for the nuances of tax credits. Importantly, we find that only 56% of taxpayers claim their donation receipts, meaning these estimates provide a ceiling of potential foregone revenue. Accounting for this, Canadian governments forewent $1.2 billion to $2.1 billion by supporting donations to religious charities in 2023.

Canada’s charity laws are overdue for an update. The country still relies on 17^th century assumptions that promoting belief in a god and involvement organized religion is a universal good. Governments use these rules to block charitable status for atheist groups. With over one-third of Canadians identifying as non-religious, we need change. It is time that all charitable organizations demonstrate their value to the broader public.

BCHA reiterates our call for the government to modernize Canada’s charity laws by removing the privileged status of advancement of religion.

Our tax system must uphold the government’s constitutional duty of religious neutrality. Religious organizations should not expect non-religious and non-practicing religious Canadians to carry the costs of their members’ beliefs. It is time to end the privilege afforded to theistic belief organizations.